In 2018, emerging market equities ended the year down nearly 15%. Approximately one-third of that loss was attributable to broad-based dollar strength against most EM currencies. Heading in to 2019, we question whether investors should remain agnostic to managing EM foreign exchange risk.
Last month, we launched the WisdomTree Emerging Markets Multifactor Fund (EMMF). Here’s how it compares with some of our existing emerging markets strategies in terms of portfolio characteristics, geographies, factor tilts and expected value added.
As multifactor investing has gained traction in recent years, the investing community has largely accepted and focused on five primary factors: size, value, quality, momentum and low volatility. We did not include low volatility as an alpha-seeking pure stock selection factor in our methodology. There are ultimately two reasons why.
WisdomTree aspires to be at the forefront of innovative ways for marrying the benefits of the ETF structure with goals that are associated with active investing. WisdomTree is expanding this strategy and providing investors access to its multifactor approach with two new active ETFs: the WisdomTree International Multifactor Fund (DWMF) and the WisdomTree Emerging Markets Multifactor Fund (EMMF).